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Wednesday, 9 February 2005
Page: 36


Senator ELLISON (Minister for Justice and Customs) (12:05 PM) —Senator Murray raised some questions in relation to the Bills Digest. The first was that some provisions seem to be unnecessary, such as item 37 of schedule 1. The advice I have is that the addition of ‘and’ at the end of these paragraphs of subsection 79(4) are necessary to ensure that these provisions are read cumulatively. In relation to the next question, I quote the Bills Digest:

... the language used in some provisions may be ambiguous and may need some refinement (such as item 23 of Schedule 1) ...

The advice that I have is that the digest suggests that it is not clear from the language of item 23 whether it applies to a bankrupt applicant for spousal maintenance or a respondent or both. The provision allows for either party to a marriage as applicant or respondent in spousal maintenance proceedings or both parties being a bankrupt. The language is necessarily open.

The next part of the query dealt with the Bills Digest, which said:

... and sometimes the reason for restricting the operation of certain provisions is unclear (see items 53 and 59 of Schedule 1).

The advice I have is that these provisions relate to the court’s powers in financial matters to make executory orders. The provisions are so drafted because in this case the bankrupt may need to execute documents or take action personally, whereas the other provisions relate to property that is vested in the bankruptcy trustee. That deals with item 53. In relation to item 59, this provision deals with the court’s injunctive powers. The provisions are designed to restrain the bankruptcy trustee from disposing of property that is the subject of an insolvency agreement or a bankruptcy. We believe the provisions make it clear that the trustee in either case is prevented from disposing of property and that the injunction is not subject to the terms of the personal insolvency agreement. That is the advice I have in relation to the Bills Digest and these amendments and the questions raised by Senator Murray. If there are any further questions, perhaps I could arrange for a briefing from the officials. Senator Murray might want that and I am more than happy for that to be done. But that is the advice I have.

Before I move the government amendments, I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber on 8 February 2005. I seek leave to move government amendments 1 and 2 together.

Leave granted.


Senator ELLISON —I move government amendments (1) and (2):

(1)    Clause 2, page 2 (table item 4, column 1), omit “and 4”, substitute “, 4 and 5”.

(2)    Page 44 (after line 23), at the end of the bill, add:

Schedule 5—Additional amendments relating to the interaction between family law and bankruptcy law

Family Law Act 1975

declaration time means the time when the declaration was signed by a party to the financial agreement (or last signed by a party to the agreement, if both parties to the agreement have signed).

separated has the same meaning as in section 48 (as affected by section 49).

These government amendments insert a new schedule 5 into the Bankruptcy and Family Law Legislation Amendment Bill 2004 [2005] and provide that the amendments in schedule 5 will commence 28 days after royal assent. The proposed new schedule 5 to the bill contains five items of amendments to the Family Law Act 1975. Like other provisions in the bill, these amendments implement key recommendations of the joint task force report on the use of bankruptcy and family law schemes to avoid payment of tax and are designed to further ensure that family law procedures are not used to defeat the interests of third-party creditors.

In particular, the amendments firstly provide for the rights of third-party creditors in proceedings under part VIII of the Family Law Act, being family property and spousal maintenance proceedings, and secondly require a separation declaration to be made by parties to a binding financial agreement that deals with post-separation financial arrangements before those aspects of the agreement can come into effect. These provisions were previously contained in part 19 of the Family Law Amendment Bill 2004. That bill was first introduced in the House of Representatives on 1 April 2004 but lapsed when parliament was prorogued during the 2004 election period. It is expected that the Family Law Amendment Bill will be reintroduced in the autumn 2005 sittings.

The reason for the transfer of these provisions from the Family Law Amendment Bill 2004 to the Bankruptcy and Family Law Legislation Amendment Bill 2004 [2005] as government amendments is to consolidate all legislative reforms dealing with the interaction of bankruptcy and family law to ensure that all related reforms proceed together. I suppose that last aspect is the most crucial part of the reason for these amendments—to ensure that both family law and bankruptcy move forward together in relation to these reforms. I commend these amendments to the committee.